SMB Training Blog

Put the trade on……NOW

It is that time of the month. Time for monthly reviews from our traders and time for me to read them.

One developing trader wrote something that will trigger an important conversation about spotting your best trades. If you do this better this month you will see improvement with your trading. This developing trader wrote:

Decrease the amount I lose trying to anticipate setups that never trigger With every good setup I had this month there was a tipping point where the trade just worked. I want to be biggest at these tipping points and minimize how much I lose anticipating these tipping points. A few times I got hurt this month trying to force a setup that never quite triggered and took a full size loss on the trade. Trying to find a balance between getting a good price and being in a position of strength and not losing on trades that never show me a real entry

On my blackboard in my office sits a trading thought to define One Good Trade for the advanced trader. Thesis + News Catalyst + Price Confirmation + Fight for Price + Trade in your Niche. The trader above prospers when he sees price confirmation. As Brian Shannon of AlphaTrends made famous for trading parlance, “Price is the only thing that pays.” For this trader, price confirmation is his trigger.

Getting in front of the trigger does not pay for him. Anticipating the trigger does not pay for him. Said another way, seeing the trade gets him paid.

Let’s use two trading examples:

Example 1: I think the market should sell off now (insert just about any well thought out reason) so I will get short.

Example 2: The market has gapped down, it has broken through the low of 30 minutes of consolidation, $TICK is signaling a sell, oil is coming off, commodities are signaling sell, so now I will get short.

Example 2 offers trader the trigger.

It is not most important what works best for this trader for your trading. What is most important is you understanding the differences between your best trades and your lesser trades. Those patterns where you have edge and it’s time for risk on. In this case for this trader, see it then risk on.